Industrial production (volume) index overview

Data extracted in November 2023.

Planned article update: November 2024.

Highlights

EU, Industrial production for total industry and main industrial groupings, 2010-2023, monthly data, seasonally adjusted, 2015 = 100 -Source: Eurostat (sts_inpr_m)

The industrial production index (abbreviated IPI and sometimes also called industrial output index or industrial volume index) is a business cycle indicator which measures monthly changes in the price-adjusted output of industry. This article takes a look at the industrial production index as it is calculated in the European Union (EU) as well as in some EFTA and candidate countries.
Please also see the monthly Eurostat news release from 15 April 2024.

Full article

General overview

After the financial and economic crisis in 2008/2009 the level of industrial production slowly increased again and regained over 90 % of its pre-crisis value by May 2011. In the second half of 2011 and in 2012, industrial production in the EU was on a slow downward trend. Since early 2013, the index value slightly but steadily increased and almost regained its pre-crisis level by the end of 2017. In 2018, industrial production in the EU grew only modestly and then fell in 2019 (Figure 1). In 2020, the Covid-19 crisis and the resulting containment measures, such as lockdowns, resulted in a massive reduction in industrial production, especially for durable consumer goods and capital goods. In the subsequent months industrial production largely recovered. In the summer of 2022 the trend in industrial production changed. Between August 2022 and September 2023 total industrial production fell by more than 5 %. Massive decreases were in particular recorded for durable consumer goods (-9.4 %) and capital goods (-7.6 %).

Figure 1: EU Industrial production for total industry and main industrial groupings, monthly data, seasonally adjusted, 2010-2023, 2015 = 100, Source: Eurostat (sts_inpr_m)

Development of main industrial groupings and individual industries

Table 1 shows a breakdown of the general development of the main industrial groupings and the industry groups in more detailed NACE divisions. Most affected by the Covid-19 crisis were capital goods and durable consumer goods, in particular machinery and equipment (-12.5 %) and motor vehicles (-19.5 %). In the main industrial grouping of non-durable consumer goods leather products (-26.1 %) and wearing apparel (-24.6 %) decreased massively.

Table 1: Annual rates of change for total industry, main industrial groupings and NACE divisions, calendar adjusted data, EU, 2010-2022 - Source: Eurostat (sts_inpr_a)

The growth rates for the different industrial sectors for the year 2022 are displayed in Figure 2. Relatively high increases were recorded for the mining of coal and lignite, for pharmaceutical products, for mining support activities but also for computers and electronical equipment. On the other side of the spectrum the production of chemical products declined by 6.1 %, the extraction of crude petroleum and natural gas dropped by 6.0 % and the production of basic metals by 4.2 %.

Figure 2: Industrial production, rate of change 2022 (%) - Source: Eurostat (sts_inpr_a)

Development by country

After the recovery from the financial and economic crisis in 2008/2009 and the following years of recovery, the EU as a whole in 2012 again displayed a negative industrial development. This downwards trend for the EU continued into 2013. However, the negative growth rates were smaller in 2013 than in 2012. In 2014, the EU returned to a positive growth which continued from 2015 to 2018. In 2019, industrial production dropped again in the EU and in the euro area, in particular in Germany, Luxembourg, and Romania. As a result of the Covid-19 crisis and the containment measures all EU countries with the exception of Ireland displayed negative rates of change in industrial production in 2020. The rates were, however, quite heterogeneous, ranging from around -11 % in Italy, France, Luxembourg and Germany to only -0.3 % in Malta. The recovery in 2021 brought comparatively high growth rates (9.1 % in the EU, 8.9 % in the euro area). High growth rates over 15 % were recorded in Belgium, Ireland, and Lithuania. In 2022 a particularly strong growth was found in Bulgaria (12.8 %), Ireland (18.9 %), and Poland (11.0 %).

Table 2: Industrial production by country, annual rates of change, calendar adjusted, 2010-2022 - Source: Eurostat (sts_inpr_a)

Source data for tables and graphs

Industrial production (volume) index overview: tables and figures

Data sources

Despite its name the industrial production index is not intended to measure production but should – in theory – reflect the development of value added in the different branches of industry. This means that the inputs obtained by one branch from another must be deducted from its gross output. In this way double counting of production is prevented and the degree of vertical integration of branches should not influence the results for the indicator.

In practice, however, it is difficult to collect value-added data on a monthly basis. Most statistical institutes therefore derive monthly production data from other sources including deflated turnover, physical production data, labour input, intermediate consumption of raw materials and energy etc.

Eurostat publishes, on a monthly basis, the industrial production index for the EU, for the euro area and the Member States; data are also collected for several non-EU countries (Table 2). Data are presented in calendar adjusted/working-day adjusted and in seasonally adjusted form. The data in this article were calculated with 2015 as the base year (=100). As of March 2024 short-term statistics data use the base year 2021.

Context

The industrial production index is one of the most important short-term statistics indicators. It is used to identify turning points in the economic development at an early stage and to assess the future development of GDP. In order to serve this purpose it is available on a monthly basis in a detailed activity breakdown and with a rather short delay (1 month and 10 days). The industrial production index is one of the so-called 'Principal European economic indicators (PEEI)' which are used to monitor and steer economic and monetary policies in the EU and in the euro area.